Danskammer sale gets one last try

Friday

Jul 26, 2013 at 2:00 AM

POUGHKEEPSIE - Thursday morning in Bankruptcy Court, almost everyone was on edge, anxious for a resolution to the protracted negotiations on the sale of the Danskammer power plant. After a short break early in the day, after a presentation by the main lawyer in the case, it looked like the $3.5 million deal was going to die. Steve Durkee, president of ICS NY Holdings, has said that the Town of Newburgh's $75 million assessment for the retired, 60-year old power plant is too high. Durkee plans to demolish the plant and salvage the scrap metal inside. U.S. Bankruptcy Court Judge Cecelia Morris fired back at Friedland that the town has nothing to do with the company's purchase of the plant; they're only an interested party, she said. ICS NY Holdings signed a contract with power plant owner Dynegy. "You haven't delivered," Morris said. "You have to perform. You shouldn't have signed the contract."

Jessica DiNapoli

POUGHKEEPSIE — Thursday morning in Bankruptcy Court, almost everyone was on edge, anxious for a resolution to the protracted negotiations on the sale of the Danskammer power plant.

After a short break early in the day, after a presentation by the main lawyer in the case, it looked like the $3.5 million deal was going to die.

"We cannot close," said Jonathan Friedland, a lawyer for the proposed buyer of Danskammer, ICS NY Holdings. "The town (of Newburgh) has essentially refused to negotiate."

Steve Durkee, president of ICS NY Holdings, has said that the $75 million assessment for the retired, 60-year old power plant is too high. Durkee plans to demolish the plant and salvage the scrap metal inside.

U.S. Bankruptcy Court Judge Cecelia Morris fired back at Friedland that the town has nothing to do with the company's purchase of the plant; they're only an interested party, she said. ICS NY Holdings signed a contract with power plant owner Dynegy.

"You haven't delivered," Morris said. "You have to perform. You shouldn't have signed the contract."

Friedland said she was correct. Morris then dismissed lawyers again to continue to work on hashing out a deal.

After another couple of hours of heated, closed-door negotiations, the lawyers saved the deal from falling through, though possibly only for another week. They agreed to postpone any final decision yet again, this time until Wednesday. This postponement, unlike earlier delays, has teeth. Morris signed an order late Thursday that demands ICS NY Holdings close the deal by Wednesday. If the company doesn't, it will lose its $350,000 deposit.

But, Durkee can buy more time to negotiate — up until Aug. 9 — if he says he will close the sale and puts down an additional $250,000 deposit.

Dynegy has been talking to several backup buyers, companies that had bid on Danskammer during the auction process last year.

It's unclear what will happen between now and Wednesday. Durkee, visibly upset at the end of the hearing, was not available for questions.

Newburgh Supervisor Wayne Booth did not attend the hearing, and did not return phone calls before deadline. Raymond Castellani, the superintendent of the Marlboro School District, the entity that has relied most heavily on tax revenues from Danskammer and nearby sister plant Roseton, said during a break in negotiations that the numbers being discussed were too low.

Morris grew visibly frustrated at some points. She wanted to know how much it cost for two hours of negotiations — which ended at the same point they began, without a resolution.

"It's a lot," said Brian Lohan, a lawyer for Dynegy.

Dynegy and its subsidiaries had run up $50.5 million in attorneys fees by June for the bankruptcy case. But Morris' sharpest criticism was reserved for ICS NY Holdings. "I'm up to here with ICS," Morris said. "If this doesn't close, there's going to be a lot of repercussions, a lot of litigation."